Under what conditions can a Sonesta Simply Suites franchisee transfer the franchise agreement to a wholly-owned corporation or LLC?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
accordance with our then-current requirements and specifications for Brand Hotels, and complete the Renovation Work therein within 120 days after the effective date of the transfer;
- (8) the transferee, at our request, signs our then current form of franchise agreement and related documents, any and all of the provisions of which may differ materially from any and all of those contained in this Agreement;
- (9) The transferee shall demonstrate to our satisfaction that the transferee meets our then-current standards for a new franchisee, including educational, managerial, and business standards; possesses a good moral character, business reputation, and credit rating; has the aptitude and ability to operate your Hotel; and has sufficient equity capital to operate your Hotel;
- (10) you or the transferee pays us a transfer fee equal to the Initial Fee, as provided in Section 3.A of this Agreement. However, no transfer fee is due if, upon a spouse's death, that spouse's interest in this Agreement and your Hotel, or ownership in you, is transferred to the surviving spouse, provided that such transfer is subject to the terms and conditions of this Section 12;
- (11) you (and your transferring owners) sign a general release, in a form satisfactory to us, of any and all claims against us and our affiliates and our and their owners, officers, directors, employees, and agents;
- (12) you and your owners agree that all the transferee's obligations under promissory notes, agreements, or security interests reserved in your Hotel are subordinate to the transferee's obligation to pay Royalty, Brand Promotion Fees, and other amounts due to us, our affiliates, and third-party vendors and otherwise to comply with this Agreement; and
- (13) you and your transferring owners will not directly or indirectly at any time or in any manner (except with respect to other Network Hotels you own and operate) identify yourself or themselves or any business as a current or former Hotel or as one of our franchisees; use any Mark, any colorable imitation of a Mark, or other indicia of a Brand Hotel in any manner or for any purpose; or utilize for any purpose any trade name, trade or service mark, or other commercial symbol that suggests or indicates a connection or association with us.
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to the 2025 Sonesta Simply Suites Franchise Disclosure Document, a franchisee can transfer the franchise agreement under certain conditions. These include meeting Sonesta Simply Suites's requirements and specifications for Brand Hotels, completing any required renovation work within 120 days of the transfer's effective date, and signing the then-current form of the franchise agreement, which may differ from the original agreement.
Additionally, the transferee must demonstrate that they meet Sonesta Simply Suites's current standards for new franchisees, including educational, managerial, and business standards. They must also possess good moral character, business reputation, and credit rating, and have the aptitude and ability to operate the hotel, along with sufficient equity capital. The franchisee or transferee must pay a transfer fee equal to the initial fee outlined in Section 3.A of the agreement, although this fee is waived in the event of a transfer to a surviving spouse upon the other spouse's death, provided the transfer adheres to the terms and conditions of Section 12.
Furthermore, the franchisee and their transferring owners must sign a general release of any claims against Sonesta Simply Suites and its affiliates. They must also ensure that all the transferee's obligations under promissory notes, agreements, or security interests related to the hotel are subordinate to the transferee's obligation to pay Royalty, Brand Promotion Fees, and other amounts due to Sonesta Simply Suites, its affiliates, and third-party vendors. Finally, the franchisee and their transferring owners must agree not to identify themselves or any business as a current or former hotel or franchisee, or use any mark or imitation thereof that suggests a connection with Sonesta Simply Suites, except with respect to other Network Hotels they own and operate.
These conditions are typical in franchising to ensure that any new franchisee meets the brand's standards and that the transfer does not negatively impact the franchise system. Prospective franchisees should carefully review these conditions and discuss any concerns with Sonesta Simply Suites before proceeding with a transfer.